April 26, 2023
As our exposure to private markets continues to grow, so do our specialized ESG expertise and in-house resources. Building on more than a decade of ESG action in private markets, BCI welcomed dedicated ESG professionals to support our programs in 2022. Learn more from Mel de Jager, Director, ESG, who supports infrastructure & renewable resources, as she shares her perspectives on the implications and possibilities for ESG in private markets.
How is ESG evolving in private markets?
There are no shortages in the number and complexity of risks facing businesses today, which are tied more and more to ESG and climate-related factors. Private markets are no exception. The scrutiny of private company ESG performance is increasing as investor, government, and societal expectations change and ESG data becomes more available. Private markets investors have a strong voice with companies through board seats and management oversight, and can use this to drive ESG integration and reporting. This growing focus on sustainability in private markets is driven by the clear relationship between positive ESG performance and a company’s ability to navigate long-term risks and opportunities. This is particularly true for real assets like those held within BCI’s infrastructure & renewable resources portfolio.
Which key considerations are informing the investment landscape?
Infrastructure and renewable resources are typically long life and capital-intensive assets, with potential for outsized impacts on the environment and society. This makes macro-environment trends and long-term thinking key to any investment decision. While critical factors like health and safety will always be top of mind in industrial asset classes, the physical and transition risks associated with climate change continue to define the investment landscape. On the other hand, the opportunities for investors to support the transition to a low-carbon economy by allocating capital to investments like renewable energy are significant and increasingly attractive.
What will you focus on in 2023?
In 2023, infrastructure & renewable resources will continue advancing our decarbonization plans to mitigate risk and create value for our clients. This includes leveraging our ownership positions to influence and guide our portfolio companies through the green energy transition. With our growing global footprint and new office in London, we are building capacity and empowering our investment teams to manage ESG across the portfolio. With our long-term outlook, research and staying ahead of the fast-changing trends in regulation and new technology will also be key.